Business-to-Business Platforms and Intermediary Liability

Posted on 27th March 2017

The European Commission is examining whether online business-to-business platforms are fairly regulated compared to other areas

After mulling imbalances in the business-to-business (B2B) online services market and ruling out ex-ante regulation last May, the European Commission has collected evidence from stakeholders on whether the terms and conditions enforced by providers of B2B services create an anticompetitive market place, where smaller providers are discriminated against and prevented from scaling-up.

Digital Vice President Andrus Ansip called a mini-summit of the Commissioners working on these issues (Cecilia Malmström, Elżbieta Bieńkowska, Margrethe Vestager, Günther Oettinger, Dimitris Avramopoulos, and Julian King) to discuss the forthcoming review of the DSM package. The Commissioners agreed to address platform-to-business trading practices, but are only “looking into these issues and exploring options”. Additional detail is expected in May 2017, most likely in the form of a Commission communication or guidance, promoting better mechanisms for redress for small companies using an online market place or cloud SaaS platforms, for example.

The underlying intention of the Commission is to bring B2B rules into line with business-to-consumer rules (B2C), where end users enjoy a greater degree of protection and redress mechanisms from the service provider. The outcome of this could be a new category of service provider: Business to small business, or B2b. Such an outcome could be extremely burdensome for B2B service providers and expose them to a range of new obligations in terms of their relationship with customers. An own initiative report prepared by MEPs at the beginning of 2017 concluded that traditional business-to-business and business-to-consumer market distinctions may no longer be fit for purpose, bearing in mind the practices by some online platforms of being both transaction intermediary and competitor and a lack of transparency in search results.

One thing that is not going to change in the short term is the limited liability regime for online platforms, as enshrined in the eCommerce Directive. At the Commissioners meeting mentioned above, there was a broad consensus that the eCommerce Directive is untouchable, meaning that online platforms can be fairly certain that they will only become liable for content on their platform if they are aware of illegal or illicit content or are considered “active monitors” of the content posted on their sites.

For its part the European Parliament acknowledges “liability is one of the main concerns in the ongoing debate” and that “certain stakeholders are dissatisfied with the current rules”.  It calls on the Commission to “draw attention to the differences between the online and offline world and to create a level playing field for comparable services online and offline” and on businesses to develop more effective voluntary measures to prevent illegal and “inappropriate” content and unfair practices.

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